Dec. 4 (Bloomberg) -- Five years after pledging to promote
more women to leadership roles without using legal quotas,
Siemens AG is fighting a losing battle.

The only two female management board members at Germany’s
largest engineering company have departed after an overhaul,
leaving the highest-ranking woman the sole female among 17
divisional heads, one level below top management.

“If businesses can’t manage it on their own, then we need
to start thinking about whether it needs to be legislated,”
Chief Executive Officer Joe Kaeser said at a networking event
for female executives in Siemens’s home city of Munich in
October.

His comments, the first from the head of a major German
company in favor of a quota, are an admission of the lack of
progress Europe’s largest economy has made in fostering female
managers. Of 191 executives on the management boards of
Germany’s 30 biggest companies, only 12 are women, down 20
percent from last year.

While the number of women in management roles rose to 19.1
percent at the end of 2012, a 1.3 percentage-point increase,
Deutsche Lufthansa AG’s Chief Financial Officer Simone Menne
remains the only female CFO or chief executive of a company in
Germany’s benchmark DAX Index.

Calling Card

Impatient for change, Chancellor Angela Merkel’s new
government is accelerating plans to require listed German
companies to fill at least 30 percent of supervisory board seats
with women. As part of an agreement with the Social Democratic
Party in coalition talks that concluded last week, companies
will have to comply by 2016, four years earlier than planned. It
also plans legal quotas for management board members.

“Our biggest companies still have almost no women in their
leadership,” German Labor Minister Ursula von der Leyen said in
a June 26 interview. “With that sort of calling card, Germany
can’t survive much longer internationally.”

Demographic change is forcing the government to examine
ways to encourage more women into Germany’s shrinking workforce.
The country has Europe’s oldest population. It also has the
second-lowest birthrate after Monaco, with just 8.37 births per
1,000 people, according to data compiled by the U.S. Central
Intelligence Agency. That places it 218th among 224 countries.

One Breadwinner

Policies that encourage mothers to stay at home and take
part-time employment, a school system with irregular hours, and
a culture that preserves the traditional role of the male earner
inhibit women pursuing careers in Germany. Legislation would
force cultural change, Henrike von Platen, head of the Business
and Professional Women lobbying group, said in a interview.

Germany’s rapid return to affluence after World War II --
the so-called “Wirtschaftswunder,” or economic miracle --
meant many households could afford to have only one breadwinner,
a luxury unrealistic in many countries, she said. That cemented
attitudes developed under the Nazi regime, when German women
were awarded the “Cross of Honor of the German Mother” medal
if they bore four or more children.

Only 44 percent of Germans believe that a male would make
career sacrifices to enable his partner to prosper
professionally, according to a study published Nov. 25 by the
household goods maker Vorwerk & Co. KG.

Vicious Circle

While part-time job programs have pushed the portion of
women in employment in Germany above levels in the U.K. and
U.S., female pay levels lag those of men. Last year, 68 percent
of German women aged 15 to 64 had jobs, compared with 60 percent
in 2005, statistics from the Organization for Economic Co-operation and Development show. Yet the gender pay gap remains
at 22 percent, the third-biggest in Europe, according to
Eurostat data published in March.

Pay levels lag employment rates because so many women are
in part-time employment, according to von Platen. Almost one in
two German women work part-time, compared with 32 percent in the
European Union, according to Eurostat.

“Once they’re in that position, the vicious circle is
pretty much completed because they seldom get out of it,” von
Platen said.

While Siemens’s Kaeser said a quota may be necessary if the
situation doesn’t improve, he said he doesn’t think it’s
required in this legislative period. Still, he’s a lone voice in
corporate Germany, where industry groups oppose gender quotas,
calling EU plans to impose a 40 percent threshold for female
directors on company supervisory boards illegal.

‘Deeply Disappointed’

The European Commission adopted a draft proposal by EU
Justice Commissioner Viviane Reding in November 2012 aimed at
requiring supervisory boards to be at least 40 percent female by
2020. Companies may face sanctions if they fail to favor women
over equally qualified men.

Reding said she was “deeply disappointed” by the slow
increase in female DAX managers in a 2012 interview with Die
Welt newspaper. “France is a positive example. In 2011, a quota
was introduced and within a year the proportion of women in
supervisory boards increased from 12 percent to 22 percent.”

France made it compulsory two years ago for large companies
to have non-executive women account for at least 20 percent of
board members by 2014, and 40 percent by 2017.

The departure at Siemens of supply chain head Barbara Kux
in November after five years and Brigitte Ederer in September
after three years as personnel chief means the most senior woman
is now Britta Fuenfstueck, who heads the clinical products
division. Janina Kugel joined as head of personnel strategy and
executive development from Osram Licht AG this month.

Necessary Skills

Both Kux and Ederer were appointees of former CEO Peter
Loescher, whom Kaeser succeeded in August. Since Kaeser took
over, Chairman Gerhard Cromme has been downsizing the board.
Kux’s contract wasn’t renewed, with the company saying her work
was complete. Ederer resigned.

Siemens says 16 percent of its leadership roles globally
are held by women, compared with 12 percent in its home country.
That meets an internal target set in 2011. The company also gave
13 million euros in extra pay in 2012 to encourage new mothers
to return to work sooner than legally required. While the German
government is introducing binding quotas, some of the biggest
companies as well as female executives remain skeptical.

Henkel AG, the maker of Loctite glue, says 30 percent of
its managers are female and it has programs in place to
accelerate the foreign postings which are a key criterion to
becoming a top manager.

“We want to increase the proportion of women in leadership
roles, but a binding fixed quota is not necessary,” Henkel’s
personnel head Kathrin Menges said by e-mail. She said about
half of the candidates in the company’s talent pool are female
and that will also be reflected in Henkel’s top management,
“sooner or later.”